The Africa Fintech Festival has generated lively discussions on the continent’s future fintech regulations. Pushing for sensible regulation and investigating the idea of “passporting” fintech regulations—a strategy that might greatly accelerate the licencing process for fintech companies operating in many African countries—were two of the event’s main themes.
According to industry professionals who spoke at the conference, the passporting strategy entails authorities in various African countries accepting and believing the fintech licences that are issued by other African countries.
This would eliminate the need for fintech companies to obtain new licences in every new area, allowing them to operate internationally with the least amount of additional regulatory barriers. Instead, they would simply need to comply with local laws.
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Proponents of passporting argue that it represents a form of smart regulation, one that fosters innovation and growth while maintaining necessary oversight. The model aims to reduce redundancy and inefficiencies that currently plague fintech companies trying to expand their services across the continent.
Salome Kimani, a Consultant at CGAP, said that passporting could be a game-changer for fintechs in Africa. It not only reduces the cost and complexity of compliance but also accelerates the pace at which innovative financial solutions can be scaled across multiple markets.
Fintech Experts Advocate for Unified Regulatory Framework
The Africa Fintech Festival, attended by over 500 participants, showcased the economic benefits of passporting, including increased investment, job creation, and financial inclusion expansion.
Leon Kiptum, Senior Vice President for East Africa at Flutterwave, advocates for passporting to standardise regulatory requirements for fintechs in Africa. He believes this would help ease the licensing process for fintechs operating in multiple countries, as each central bank has its own set of rules.
According to Kiptum, he said that for passporting to take effect, central banks in Africa need to communicate and agree on standards. If the people in the industry can help inform the standards, then they will be willing to go through the process with the central banks through the fintech lobby groups, like the Africa Fintech Network.
Sebie Salim, Co-Founder of Eclectics International, suggests promoting continent-wide passporting through the African Union or regionally, citing West African countries’ successful passporting practices and lobbying for it through the East African Community organisation.
Adrian Pillay, VP Sales at Provenir, emphasised the significance of regulatory collaboration for fintech companies, highlighting passporting as a practical solution for innovation and customer service.
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Coordinating Regulations : Key to unlocking African Fintech Potentials
The festival highlighted successful European Union passporting models for financial services, encouraging African fintech to adopt similar approaches. Panellists emphasised the need for harmonised regulatory frameworks and cooperation among African regulatory bodies to achieve similar results.
South African Fintech Association President Kagisho Dachabe emphasises the need for standardised regulations and mutual trust to standardise the fintech industry in Africa.
Furthermore,the Africa Fintech Festival concluded with a call to action for regulators and industry players to collaborate on creating a more conducive regulatory environment for fintech innovation. As Africa continues to position itself as a global fintech hub, passporting could play a crucial role in unlocking the continent’s full potential.